Weekend Argus (Saturday Edition)
PRICES SOFTENING
TOP AREAS HIT HARD
How the different areas are faring:
FNB’s 1Q19 City of Cape Town SubRegional House Price Indices showed softening prices across virtually all subregions, with the upmarket sub-regions in and around the Cape Peninsula the hardest hit, according to the latest FNB stats.
Atlantic seaboard is the most expensive sub-region in the City of Cape Town Metro, this area has seen its average house-price growth plunge from a multiyear high of 25.5% y/y in 1Q16 to an alltime low of -5.1% by 1Q19. The sub-region was the first to slide into contraction, with -0.08% y/y growth in 3Q18. The deflation appears to have spilled over to the rest of the regions near Table Mountain.
The city bowl, the economic hub of the region, slid deeper into contraction in 1Q19, registering -2.0% y/y from a mild contraction of 0.2% in the previous quarter.
The southern suburbs (incorporating suburbs such as Claremont, Newlands and Observatory) followed suit and contracted by 2.4% y/y in 1Q19, from a peak of 15.4% y/y in mid-2015.
The eastern suburbs (incorporating suburbs such as Woodstock, Maitland and Pinelands), which for some time held up better than the rest of the regions surrounding Table Mountain, declined by 4.2% y/y in 1Q19.
Moving down the price ladder and away from the mountain:
Northern suburbs (generally in the middle of the price spectrum) are holding up relatively better, but are showing a sharp deceleration in house-price growth. For some time these regions were perceived as offering more affordable housing opportunities as affordability deteriorated rapidly nearer the mountain. Ultimately, prices overshot and completely counteracted their initial attractiveness. Unsurprisingly, as demand slowed, price growth slowed. Bellville-Parow and surroundings
(including Goodwood) and Durbanville-Kraaifontein-Brackenfell sub-regions slowed to 4.0% and 2.9% y/y from 6.1% y/y and 4.2% respectively. The western seaboard sub-region registered 1.8% y/y in 1Q19 from 3.8% y/y in 4Q18.
Lower priced regions holding firm
THE MORE affordable sub-regions in the city, which incorporate township areas, are performing well above the city’s average and remain in the double digits.
The Cape Flats region has held relatively steady around the 12% mark over the past year, although it retreated to 11.3% y/y in 1Q19 from 12.1% in 4Q18. The Elsies River/Blue Downs/ Macassar region, where growth has been cooling over the past year or so, now appears to be stabilising around the 10% y/y mark, and is the only region that did not experience slowing prices in 1Q19. Average house-price growth ticked up to 10.5% y/y in 1Q19, from 10.1% in 4Q18.